Reversible vs. Irreversible

For the most part, we think that all of our decisions are final — when we commit to a path, we cannot go back. Indeed, many of our decisions require us to go all-in. But in most cases, there would have been a way out if we had fought to create one. In order to navigate complex decisions, we all develop our own internal mental models which guide our way of thinking.

One that has become very common among entrepreneurs is to radically say no to any request that does not provide you with any immediate value; another is to only make decisions after taking a day to think about it. Another framework which has merit is considering whether or not a decision is reversible or irreversible. The overall idea behind this framework is that we should work as hard as possible to make our decisions reversible, as doing so gives us more protection if something goes wrong. Choosing to start a startup may be the best thing you can do, but having a backup plan is also a good idea. If your business succeeds, you will never need the backup plan. If your business fails, you will know exactly how to transition back to a point of safety.

Reversible decisions require less contemplation

When we are making decisions, we tend to believe in the principle that more information is good. Especially when we are making big decisions that impact our entire life, we like to be thorough in gathering information. Indeed, having information is the key to making good decisions, and it can take a lot of time to gather all of the quality data you need to make a truly informed decision. However, many people use gathering information as an excuse to delay making a decision. They gather too much information from outside sources, and become less certain in their own judgement.

If we are making a decision that is irreversible or not easily reversible — moving to a new country, for example — then careful contemplation is prudent. But this form of thinking takes time, and it is easy for us to go down the rabbit hole of gathering more information. When you read more information than necessary, you will end up in a worse position then when you started — you may have been exposed to conflicting information that may not be pertinent to the decision you are making. On the other hand, if you make reversible decisions, you don’t need to spend as much time thinking. If I decide to go a new restaurant, I know that if their food is bad I can always go somewhere else — the decision is reversible. Thus, I don’t need to spend days looking at reviews and asking many of my friends about that restaurant. You can make decisions quicker because you know that even if you miss something, you can get back to a point of safety soon.

Reversible decisions help us deal with uncertainty

Most of the decisions we make come with some form of uncertainty. When we decide to go to that new diner, we don’t know exactly what to expect. But it’s not a massive problem if you don’t like their food — you don’t have to go back again, and you can grab something on your way back from the restaurant. This uncertainty is easy to manage — we can always get out of the restaurant if things don’t go well. When we are making big decisions though, it can be more difficult to navigate uncertainty. Let’s say you were presented with a great job offer and were deciding whether or not you should take the job. The promotion prospects and the salary are both great, but you are unsure about the team with whom you will be working. This uncertainty may cause us to spend all of our time gathering information, and the offer may be retracted because we could not make a decision on time.

Reversible decisions can be made with relative ease without having to worry about gathering information endlessly. You can spend less time on research and feel more confident in your end decision because there will be a way out if your decision does not go well. This is important because making decisions faster than other people is valued greatly by society. The person who is on a team who can make quick and efficient decisions will be valued more than the person who can make great decisions but takes a long time to return an answer. The ability to make quick decisions allows you to move forward faster toward your goal. If you are spending your time deliberating, you cannot act on the outcome of a decision. If you make a quick decision, you can get on with what you need to do. This is not an excuse to rush your decision-making or to gather an inadequate amount of information, rather that we can often be more successful is we make reversible decisions and focus on efficiency.

Create a system for measuring certainty

When you are making decisions, you should create a system to measure how certain you are about something. If you wait until you are fully certain about a decision, you will end up missing out on opportunities because you did not make a decision on-time. Therefore, we should create a rule which states how certain we need to be before making a decision. If you are 80 percent certain about a decision, perhaps committing to that decision is better than waiting until you are 90 percent certain. If you make the decision when you are almost certain, you can get to work sooner; if you wait, it could be too late for you to do anything.

Making reversible decisions is a critical part of risk management. Reversible decisions are the choices you make that you can walk back. Irreversible decisions are the decisions which you will need to proceed with even if things don’t go well — you have already made the decision, and you have to deal with the consequences. Most of the decisions we make are reversible, because reversible decisions give us more freedom and options. If we know we can reverse a decision, when things go badly there is always another path we can take. But if we can’t reverse a decision, when things go badly due to something that we could have mitigated, we must face all of the consequences. Thus, we should try to make as many of our irreversible decisions reversible. They are easier to walk back, easier to manage, and are less stressful.

Understanding that decisions can be reversible is a key component of making better decisions. Once you understand this concept, you can work toward making more decisions that are reversible. Making reversible decisions can limit your upside — the amount which you will gain from making a decision — but doing so limits your downside even more. You have a form of protection against something going very badly. The goal of your decision-making process should be to make good decisions efficiently and quickly, rather than making great decisions slower than everyone else.